May 4, 2006
Law Firm Services: Too good, too expensive, and too inconvenient
Here is a lesson worth learning. According to the Harvard Business Review, Clayton Christensen, a Harvard Business School professor, has hypostatized that most organizations make products that are too good, too expensive, and too inconvenient for many customers.
Peter Drucker recognized the same tendency in discussing the weakness that market leaders invariably develop over time. They continue to add features to satisfy marginal segments of the market, opening the opportunity for a competitor to enter the market at 20% of the cost with a product that satisfies 80% of the market.
What is important for the law firm is that this tendency isn’t limited to tangible products. Services are susceptible to the same condition. I should add that the reference to “too good” doesn’t refer to quality, but instead addresses the tendency of products to become “over-featured”. For the law firm, this is the equivalent of “over-lawyering”—applying complex solutions to simple situations.
Granted, there are times and issues where law firm clients want their lawyer to pull out all the stops. However, the majority of clients, business and non-business types, view their law firm experience as too inconvenient, overly complex, excessively lawyered, and too expensive. We hear the same mantra over and over again from law firm business clients: “We want a law firm concerned about lowering our legal cost.”
Clients are not looking for services at a cheaper price. They are looking for services appropriate to the situation, services that cost no more that the situation requires. Of course, they also want a court system that is faster, convenient, and predictable. They want a tax system that is simpler. They want less regulation. Unfortunately, we are never going to get back to just 10 Commandments, but that doesn’t stop the customers for legal services from wishing for simpler times. It is the very complexity of our legal systems that creates the demand for law firm services. Nevertheless, never forget that those same clients come to you to make things less complex, less inconvenient, and less expensive!
If you accept our Harvard professor's theory, then law firms face opportunities and risks that are merely different sides of the same coin. Law firms can reap significant rewards if they make the solution to the customer’s legal needs simpler, less expensive, and easier for people to get. They risk losing business to providers (including alternatives to the law firm) who invent convenient, simple, and less expensive solutions. Look at TurboTax for a perfect example.
It is all about innovation and reinvention. Clayton Christensen calls it “disruptive innovation” and suggests that there are three key strategies:
- Make it easier and simpler for people to get what they need
- Provide good enough solutions to those with low-end requirements and risk
- Remove barriers to consumption
If you are looking for a breakthrough growth strategy, start brainstorming about these three strategic directions. For example, what are the barriers to consumption? What keeps clients from being able to solve their own needs? What keeps people and businesses from seeking legal advice and services? What tactics could your law firm use to remove those barriers among its targeted clients? There are fortunes to be made by those who invent solutions to those barriers.
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Filed under Blog by Tom Collins